Monthly Archives: December 2018

Internet provider options (landline options, cellular, cable & satellite and relative costs)

Internet provider options (landline options, cellular, cable & satellite and relative costs) Typical minimal speed Land Line Internet (3 MPS) runs in the $35 – $40 per month range. We have already discussed the costs for cellular data, which also includes phone & text. Most new cell phones also include a mobile hotspot which functions in the same way as a Wi-Fi unit. Some companies will charge an extra $5 – $10 per month to activate it, but it can be a good deal if you want to completely stay away from land line use. There are also android apps that allow you to bypass the monthly charge for a onetime fee (usually only a small fee.) If you plan to go this route for all of your Internet use you will want to use the type of service plan that allows for unlimited highest speed access. One other less publicized method of by passing the “hot spot” charge is to use the Bluetooth functions on your smart phone and laptop to “pair” the devices.

–         Broadband speeds, how much do you need? If you are a casual user I would recommend staying with the low-end service (3-5 MPS). This actually works ok for most streaming (Netflix, Premium, Hulu, etc.). My recommendation is to always start with the basic service as you can always upgrade later if you feel the need.

End 12/01

Keynes vs. Friedman

Keynes vs. Friedman

John Maynard Keynes, who died in 1946, and Milton Friedman, who died in 2006, were the most influential economists of the 20th century. As a side note Keynes was 6’ 7” & Friedman was 5’ 0” (not that their physical stature has any bearing on the validity of their theories)

Please understand that I most likely will oversimplify the theories of these genius economists. The only “C” I made in Graduate School was in macroeconomics so this area is a definite weakness for me. However, the point I hope to make will not depend entirely on my understanding.

Keynes theory was in part based on the government’s role in facilitating the country’s recovery from the Great Depression. The WPA, PWA and eight other work programs of the 30’s combined with the war effort of the early 40’s resulted in near full employment and an economic boon that fueled the post war era and established the USA as the dominant economic super power of that era. Obviously, his theory is the basis of the current Democratic Party’s economic thinking. Deficit spending can be an effective method of stimulating the economy.

What many folks tend to forget is that Keynes was a proponent of running government surpluses during good economic times. He also warned that exceeding a 75% debt to GDP ratio should be avoided and doing this would be a sign of future economic disaster. The current ratio stands at 105.53% and it is growing! Keynes would be appalled.  Can you imagine what Friedman would say?

Friedman has been the darling of Republicans. He has opposed government deficits and his theory was that the best economy would be achieved in a free market system without government inference. Only monetary policy adjustments should be used to stimulate or retard growth.

Based on these competing theories I would have assumed that the Democrats would have been primarily responsible for the debt epidemic, but it turns out I was wrong. Actually, both parties have been co-conspirators. If you would like to see the details on this I would refer you to a prior posting on this subject titled: Two party System – Summary of budget results for the Parties which was posted on 2/13/2016.

I suggest we evaluate our elected officials by what they do and not what they say. The massive build up in our debt is evidenced by the following 50-year record:

Fiscal Year  Deficit   (in billions) Debt Increase (by FY)  Deficit /GDP Events Affecting Deficit  
1970 $3 $17   0.3% Recession.
1971 $23 $27   2.0% Wage price controls.
1972 $23 $29   1.8% Stagflation.
1973 $15 $31   1.0% End of gold standard.
1974 $6 $17   0.4% Budget process created.
1975 $53 $58   3.1% First Ford budget.
1976 $74 $87   3.9% Stagflation.
1977 $54 $78   2.5% Stagflation.
1978 $59 $73   2.5% First Carter budget.
1979 $41 $55   1.5% Volcker raised rates to 20%.
1980 $74 $81   2.6% Recession. Iran oil embargo.
1981 $79 $90   2.4% Reagan tax cut.
1982 $128 $144   3.8% Reagan’s 1st budget.
1983 $208 $235   5.6% Jobless rate 10.8%.
1984 $185 $195   4.5% Increased defense spending.
1985 $212 $256   4.8%
1986 $221 $297   4.8% Tax cut.
1987 $150 $225   3.1% Market crash
1988 $155 $252   2.9% Fed raised rates.
1989 $153 $255   2.7% S&L Crisis.
1990 $221 $376   3.7% Desert Storm.
1991 $269 $432   4.3% Recession.
1992 $290 $399   4.4%  
1993 $255 $347   3.7% Clinton signed Balanced Budget Act.
1994 $203 $281   2.8% First Clinton budget.
1995 $164 $281   2.1%  
1996 $107 $251   1.3% Welfare reform.
1997 $22 $188   0.3%  
1998 ($69) $113  (0.8%) LTCM crisis.
1999 ($126) $130  (1.3%) Glass-Steagall repealed.
2000 ($236) $18  (2.3%) Surplus.
2001 ($128) $133  (1.2%) 9/11 attacks. EGTRRA.
2002 $158 $421   1.4% War on Terror.
2003 $378 $555   3.3% JGTRRA.
2004 $413 $596   3.4%  
2005 $318 $554   2.4% Katrina. Bankruptcy Act.
2006 $248 $574   1.8% Bernanke chairs Fed.
2007 $161 $501   1.1% Iraq War cost.
2008 $459 $1,017   3.1% Bank bailout. QE.
2009 $1,413 $1,632   9.8% Stimulus Act.
2010 $1,294 $1,905   8.6% Obama tax cutsACA.
2011 $1,300 $1,229   8.3% Debt crisis.
2012 $1,087 $1,276   6.7% Fiscal cliff.
2013 $679 $672   4.0% Sequester. Government shutdown
2014 $485 $1,086   2.7% Debt ceiling.
2015 $438 $327   2.4% Defense = $736.4 b.
2016 $585 $1,423   3.1% Defense = $767.3 b.
2017 $665 $672   3.4% Defense = $812.3 b.
2018 (est) $833 $1,271   4.0% Defense = $824.7 b Trump tax cut.
2019 (est) $984 $1,187   NA  Trump tax cut
2020 (est) $987 $1,198   NA Trump tax cut

Note that the estimated deficit for 2018 that was published many months ago had already been exceeded with 35 days to go in the year. At a rate of over $2 billion a day the actual 2018 deficit will exceed $900 Billion and the national debt will increase by over $1.3 trillion, approaching $22 trillion by years end.